A bill raising required education standards for advisers has passed both houses of Parliament, but Labor is still pushing for a royal commission on banks.

ALP MP Andrew Leigh told the House of Representatives the bill represents “belated action” to improve advisers’ professional standards.

“We are going to continue to argue for a royal commission into the banks, because, while we are supporting this bill, we do not believe that the Government’s attempts to [tackle] egregious wrongdoing in the financial advice sector have been strong enough,” he said.

“Only a royal commission can get to the bottom of the culture and practices that have let misconduct in the financial sector continue to grow.”

The bill allows for an independent standards board to set education standards for advisers.

It will also set the professional-year framework and continuing professional development requirements, set a registration exam and develop a code of ethics for financial planners. 

The professional standards regime will start on January 1 2019.

Current financial advisers will benefit from transitional arrangements, giving them until January 1 2021 to pass the exam and until January 1 2024 to meet the education requirements.

Former financial adviser and Liberal MP Bert van Manen challenged Dr Leigh’s assumption all advisers work for the banks.

“There are many independent, professional financial advisers in this country who want to see the standards of their industry improved and developed for the future, to ensure that the advice provided to the Australian public is in their best interests,” he told the house.

“It is of no interest to these small business owners around the country to provide poor, negligent advice or poor ongoing service to their clients.”

Mr van Manen says not all instances of bad advice are the adviser’s fault, and he wants more scrutiny on products.

“There have been many instances during the past 10 years that relate to product failure that the adviser has borne the brunt of,” he said.

“I think this is something that still needs to be addressed in the structure of our regulation, but this lack of trust and confidence has led to poor outcomes for consumers and the industry.”